Senate Approves Budget; Looming Deadline; KPERS

Feb 12, 2016 by

Senate Approves Budget; On to Conference

The House approved their version of the budget on Thursday morning, the Senate did so Thursday night.

The House budget includes the delay in payments to KPERS with “promises” to pay the money back next year. On a motion of Rep. Johnson (R-Asaria), the House amended the KPERS provision to require the payback in the first quarter of the next fiscal year with 8% interest. The Senate, on the other hand, removed the delay of KPERS funding requiring the state to go ahead and fund KPERS as scheduled.

Both chambers also ignored the Supreme Court decision on school funding equity that came out Thursday morning. The Court decision found SB 7 (block grants) to be unconstitutional in that it does not provide for equity. There had been some thought that votes on the budget would be postponed. A motion to refer the budget back to committee failed on the House floor.

We will now be interested in seeing how the Legislature plans to respond to the Court’s ruling.

The roll call vote on the budget in the Senate (HB 2365) is as follows:

YEA: Abrams, Arpke, Bowers, Bruce, Denning, Donovan, Fitzgerald, Holmes, Kerschen, King, Knox, Love, Lynn, Masterson, Melcher, O’Donnell, Olson, Ostmeyer, Petersen, Pilcher-Cook, Powell, Smith, Wagle, and Wilborn.

NAY: Baumgardner, Faust-Goudeau, Francisco, Haley, Hawk, Hensley, Holland, Kelly, LaTurner, Longbine, Pettey, Pyle, V. Schmidt, Tyson, and Wolf.

McGinn was absent.


The June 30 Deadline Looms!

You’ve been reading that the Supreme Court has given the Legislature until June 30 to address the equity issues in school funding. Yet to be decided is whether or not overall funding is adequate.

The Court clearly said that if the order is not addressed by that date, then schools would be closed because the state would be prohibited from providing funding in an unconstitutional manner.

This order has led to plenty of posturing and chest-pounding on the part of some in the Legislature.

But we are confident that, when the dust settles, the Legislature will get back to work and address the situation. There is still plenty of time between now and June 30 for the Legislature to take the appropriate action and that is our expectation. No one on either side of the aisle and of any ideology really wants schools to close. KNEA, along with all other advocates for the education of Kansas kids will be working in any way we can to keep the process moving forward until a reasonable solution is found.


KPERS Capers

The House Pension Committee has been quite busy the last couple of days. First during Wednesday’s regularly meeting they heard testimony regarding HB 2542 known as the COLA bill. There were 5 proponents and no opponents nor was there any neutral testimony regarding the bill. There was some spirited discussion during the testimony, but in the end we would be surprised if the committee works the bill.  During yesterday’s questions and statements legislators expressed sympathy, but also asserted that there is no money to support such an effort. Given those statements from the legislators yesterday and the ruling against the state by the Supreme Court regarding the equity portion of the Gannon Case which puts the state’s budget in turmoil, we do not believe there is much hope for the bill.

After the regular committee meeting the subcommittee on Working after Retirement (WAR) met. They discussed certain aspects of WAR regulations during a brief meeting. The subcommittee met again today to begin finalizing recommendations to a bill modifying the WAR regulations.

The subcommittee is considering the following WAR recommendations for submission to the House Pensions Committee:

Using one bill to put together HB 2656, HB 2654, and HB 2653 with balloons that address the discussions of the subcommittee. HB 2656 is Rep. Trimmers bill regarding working until 62 at which time a person would be able to choose WAR options that resemble the regulations that recently sunset. HB 2654 addresses nurses and WAR. HB 2653 addresses grandfathering in folks into WAR for 2 more years, grant the hardship cases a 3 year extension rather than a year by year extension. Next they also discussed that the hardship cases not go through the legislative committee for approval.

Consideration of how to implement Representative Edmonds’ request for a signed document declaring that no previous discussions had occurred for a position that a person applies for under WAR regulations. The document would be signed by the employee and in the case of school districts the board president.

 

 

 

 

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Supreme Court Issues Equity Ruling in Gannon!

Feb 11, 2016 by

Supreme Court Issues Equity Ruling in Gannon!

In an opinion issued at 9:30 this morning, the Kansas Supreme Court ruled in favor of the plaintiffs in the equity portion of the Gannon School Finance Lawsuit.

The Court upheld the lower court’s ruling that found the block grant school funding scheme (SB 7) violated the equity provisions that once provided state aid for capital outlay and local option budgets.

The Court gives the legislature until the end of the fiscal year (June 30, 2016) to solve the issue suggesting that they could do so via a new formula or by restoring the equity provisions of the prior school finance formula within the block grant.

The Court asserted that the constitution represented the will of the people and as such had to be respected by the legislature. The Court said that while the legislature has the responsibility to pass laws and appropriate funds, the Courts exist to ensure that the will of the people as expressed in the constitution is paramount. Article 6 of the Kansas Constitution deals specifically with public education.

While the lower court had ruled SB 7 unconstitutional, the Supreme Court issued a stay of that court’s order to overturn SB 7. In this decision that stay is not lifted. Schools will continue to be funded for the 2015-16 school year under the block grant program while the legislature is given the opportunity to restore equity to the funding of schools.

Your questions answered:

Is my job in jeopardy?

Your job is secure. The Court’s decision does not negatively impact school districts’ ability to meet their contractual obligations for the 2015-16 school year.

When will the legislature decide?

The Legislature has been given a deadline of June 30, 2016 to restore equity to school funding. We would expect there to be a brief time in the session for statements and positioning before they get to work on the issue. We are not yet half way through the 2016 legislative session, so they have time to get this done.

How much money are we talking about?

The equity portion would cost approximately $50 million.

Where will that money come from?

This is the most difficult question to answer. The Governor’s reckless tax policies have bankrupted the state treasury and right now there appears to be little interest in restoring the state’s revenue stream. It is hard to imagine a way to fund this requirement without directly harming some other critical part of the state budget. The legislature has nearly drained the highway fund and the budget bill advanced by the House yesterday delays payments to KPERS to keep it balanced. One would hope the legislature would address the fact that they have exempted over 300,000 Kansas businesses from paying income taxes entirely.

Does this have an impact on bargaining?

It could if the issue is resolved quickly. If not, districts will be left wondering how much money they will ultimately get for the next school year.

What does the June 30 deadline mean?

It means that the Legislature must make a decision that is acceptable to the Court. The decision should not wait until that day since the Court will review the remedy and determine if it is constitutional.

If they fix this, is the Gannon case finally resolved?

No. There is a second part to the case that has yet to be argued. The Court will consider adequacy at a later date.

The decision, while long, makes for very interesting reading. You can read all 80 pages for yourself by clicking here.

Kansas NEA will continue to maintain an active presence as the state’s largest professional association of educators. We will continually review developments in this case in order to provide reasoned analysis on behalf of our members. 

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Court Arguments and Tax Discussions

Nov 6, 2015 by

School Finance Equity Hearing in Supreme Court

The Kansas Supreme Court heard from the state and from the plaintiffs in the equity portion of the Gannon School Finance lawsuit today. The hearing took about 2 ½ hours.

Attorneys for the state were questioned first. They defended the block grant funding scheme passed by the legislature (SB 7) and asserted that the money the legislature had appropriated for the equity resolution last year was appropriate to meet the requirement.

The money that had been appropriated was about $138 million but the final cost was closer to $200 million. The state argued that the money appropriated was based on what they were told by the State Department of Education. KSDE had provided an estimate of the amount that would be needed based on the prior year’s data – the only data available at that time.

Attorneys for the plaintiffs maintained that it was long past time to resolve the issue and that the repeal of a constitutionally sound but underfunded school finance formula was an inappropriate action by the legislature.

Questioning of both sides by the justices was pointed but it was difficult to tell with any certainty what position they might be forming.

We don’t know when they will make their ruling but most expect it to come early in the session.

The issue of adequacy is still to be resolved.

Special Tax Committee considers sales tax exemptions, tax credits

A special Joint Committee on Taxation spent the last two days learning about the challenges of sales tax policy and tax credits.

The committee studied the history of the sales tax in Kansas and reviewed Legislative Post Audit studies that have been conducted on sales tax exemptions, tax credits, and economic development incentives.

They took public testimony today. Shawnee Mission Superintendent Jim Hinson gave them much food for thought regarding Tax Increment Financing Districts (TIFs) which have the potential to stress the budgets of school districts – particularly growing districts like Shawnee Mission.

KNEA lobbyist Mark Desetti testified, urging the committee to reign in the granting of sales tax exemptions by developing guidelines under which an organization would be eligible for such an exemption. Today these exemptions are generally granted every time an organization comes before the committee with a pitch leading to an enormous laundry list of individually named organizations with exemptions.

A coalition of non-profit organizations urged the committee to proceed cautiously while the Sisters of Charity made a plea for the preservation of the Earned Income Tax Credit which applies to the lowest income Kansans.

The Kansas Livestock Association and Farm Bureau both spoke on behalf of rural and agricultural interests in the state.

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